IRA impact on orphan drug development, PBMs on Capitol Hill, state PDAB updates, and more.

July 30, 2024

Welcome to NPC This Week! We hope you'll join us each week for a look-ahead at the policy, research, and industry conversations that matter to the future of biopharmaceutical innovation. The DMs are open if you have suggestions — and please share with your network. - Michael Pratt and Devon Bortz

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NPC Highlights

Concerns About the IRA: NPC’s research published in AJMC on the unintended consequences of the IRA’s Drug Price Negotiation Program included data on the potential impact of the program on orphan drugs. The study found there were 18 post-approval orphan indications for a select group of high cost small molecule drugs, which the IRA now disincentivizes.

Value Viewpoint: In her latest “Value Viewpoint,” NPC Chief Strategy Officer Kimberly Westrich reviews an editorial from the Journal of Comparative Effectiveness Research examining the global use of the ISPOR value flower.

Industry News

PBMs Face Questions from Congress: Top executives from the three largest pharmacy benefit managers testified before a House committee last week on the role PBMs play in rising health care costs. Media noted that the PBM leaders “stayed on message” by denying that their companies place cost-cutting over patient benefit, though members of Congress were largely not convinced and called for further investigation.

• House Oversight Report: The hearing was preceded by the release of a House Oversight Committee review of 140,000 pages of documents and communications, finding that large PBMs have deployed "anti-competitive policies" that increase prescription drug prices and undermine independent pharmacies.
• Looking Back at NPC Research: According to NPC’s study published in the American Journal of Managed Care, nearly two-thirds of employers with self-funded pharmacy benefits have specialty-drug arrangements that include rebate guarantees.

Returning 340B to its “Original Purpose”: The 340B Drug Pricing Program was enacted more than 30 years ago to help a small number of hospitals serving lower-income and uninsured pients stretch their resources. The program has since ballooned in size, and researchers write in JAMA Health Forum that “fundamental reforms that focus the program on its original purpose can ensure the 340B program helps low-income patients without unintended consequences.”

• Looking Back at NPC-Supported Research: A recent study that the National Pharmaceutical Council completed with IQVIA examined the economic impacts of the 340B program on self-insured employers and their workers. The model estimates that drug costs for self-insured employers and their workers were 4.2% higher than they would be if the 340B program did not exist.

State PDAB Overview: The National Law Review released a primer on scope of existing PDABs in the country. To date, many states have enacted PDABs with varying levels of authority.

• Looking Back at NPC Research: Last month, the NPC research team published an article in Health Affairs Forefront that detailed the uncertainties, challenges, and unintended consequences for patients as state PDABs take varying approaches to implementing upper payment limits.

ICYMI

March-In Rights: A recent viewpoint in JAMA, authored by Dr. Daniel G. Aaron and J. Jonas Anderson, explores the 2023 Biden administration proposal for U.S. agencies to use so-called “march-in rights” on pharmaceutical patents – which the authors point out would impact drug pricing and incentives for innovation.

The Gross-to-Net Bubble: Drug Channels Institute published its annual analysis of manufacturer list and net price disclosures, showing the actual prices of brand-name drugs from 10 pharmaceutical companies have either fallen or risen modestly once rebates and discounts are considered.

Physician Specialties and Value-Based Care: Value-based care payment models are gaining popularity as alternatives to traditional fee-for-service frameworks. A new study in Health Affairs Scholar explores variation in adoption of value-based care arrangements among physicians, identifies specialties most likely to participate in value based arrangements, and recommends strategies for closing the gap.?

Long-Term Care Pharmacy Association Voices Concerns on the IRA and PBMs: Members of the Senior Care Pharmacy Coalition are urging lawmakers to adjust the payment model for long-term care pharmacies, saying that the implementation of Medicare price controls and continuous lower reimbursement from PBMs threaten the operations of these facilities.

Researcher Raises Concerns on the Chilling Impacts of the IRA on Pharmaceutical Innovation: Progress in combating neurological disease such as Alzheimer’s could be stalled or undone by the “short-term savings that price controls promise,” writes Sally Pipes, president and CEO of the Pacific Research Institute.

Welcome to NPC! NPC is excited to announce the appointment of Jacquelyn (Jackie) McRae, PharmD, MS,? as vice president of policy and external affairs.?

Mark Your Calendar

September 30: On the first day of the 2024 Fierce Biotech Summit in Boston, NPC President and CEO John O’Brien will join Christie Bloomquist, Vice President of Government Affairs and Policy for Astellas, for a panel discussion on “Political Pathways: Navigating the 2024 Election Cycle in Biotech.” The session aims to empower biotech industry leaders with actionable insights and strategic approaches to thrive amidst the complexities of the 2024 election cycles and its implications on the industry landscape. Learn more and register for the 2024 Fierce Biotech Summit here.

October 15: At AMCP Nexus 2024 in Las Vegas, NPC Chief Strategy Officer Westrich will participate in a panel on “What You Need to Know About Copay Accumulators, Maximizers, and Alternative Funding Programs.” The session will take place from 8:30 – 9:45 AM PT and will include a deep dive into the regulation and potential employer implementation of accumulators, maximizers, and AFPs. Learn more and register for AMCP Nexus 2024 here.